[Gauntlet] - cbXRP Recommendations
Summary
Gauntlet recommends onboarding cbXRP as collateral in Moonwell’s Core lending markets on Base, following a thorough assessment of critical risk factors. This evaluation considered cbXRP’s liquidity profile (both depth and structure), price volatility, and its overall fit within the protocol’s risk parameters.
cbXRP
cbXRP is a wrapped version of XRP, created and maintained by Coinbase. cbXRP is redeemable for native XRP.
Risk Parameter Recommendations
| Parameters | Values |
|---|---|
| CF | 70% |
| Supply Cap | 1M cbXRP |
| Borrow Cap | 500K cbXRP |
| Protocol Seize Share | 30% |
IR Recommendations
| IR Parameters | Recommended |
|---|---|
| Base | 0 |
| Kink | 0.45 |
| Multiplier | 0.23 |
| Jump Multiplier | 5 |
| Reserve Factor | 0.3 |
Supporting Data
DEX TVL
| pool_name | pool_type | pool_url | pool_tvl_usd | volume_24h_usd |
|---|---|---|---|---|
| cbXRP / WETH 1% | aerodrome-slipstream | Link | $620.51K | $34.95K |
| cbXRP / cbBTC 0.25% | aerodrome-slipstream | Link | $283.50K | $500.36K |
Onchain Circulation
- ~2.3M with Coinbase holding ~91% circulation.
- Second and third highest holders are the Aerodrome LPs taking up ~4% total onchain circulation.
- The Fourth highest holder (~1.3% circulation) holds the following assets no Base:
Liquidity & Slippage
Selling 500K cbXRP under current market conditions is estimated to incur 40–50% slippage. However, we anticipate a significant improvement in liquidity over the coming days.
Liquidity doubled within 12 hours on June 5.
We also evaluated XRP’s liquidity on other chains to help inform expectations for cbXRP’s liquidity profile over time. For instance, executing a 1 million XRP sell order on Binance Smart Chain (BSC) would result in approximately 10% slippage, indicating relatively deep liquidity. This cross-chain analysis provides a useful reference point for understanding how cbXRP liquidity might evolve as adoption grows on Base.
XRP Price Volatility
Over the last 180 days, XRP’s annualized daily log returns have spanned from a high of +25% to a low of -13%, underscoring the asset’s sensitivity to both upward trends and downward corrections. The current 30-day annualized log volatility is 60%, which is generally closer to other volatile blue chip assets.
XRP’s price is primarily influenced by regulatory developments, most notably the SEC lawsuit, which shape investor confidence and institutional adoption. Broader market sentiment, macroeconomic conditions, and Ripple’s partnerships with financial institutions also play key roles in driving demand. Liquidity, exchange listings, and on-chain activity (like escrow releases) affect short-term volatility. Overall, XRP tends to be less volatile than many other crypto assets due to its established utility and relatively deep liquidity.
Supply and Borrow Caps
We recommend a supply cap of 1M and a borrow cap of 500K, taking into account cbXRP’s on-chain circulation, distribution structure, overall risk profile, and liquidity conditions.
Collateral Factor
We recommend setting the collateral factor at 70%. While cbXRP presents a comparatively strong risk profile, applying a conservative CF allows greater flexibility for future cap increases and helps manage risk prudently during initial onboarding.
IR Parameter Specifications
IR Curves
XRP does not support native staking, but holders can earn yield through centralized platforms, which offer up to 5-12% APY.
| Utilization | Borrow APR | Supply APR |
|---|---|---|
| 0 | 0 | 0 |
| 45 | 10.35% | 3.26% |
| 100 | 285.35% | 199.74% |
We recommend an IR curve with a borrow APR of 10.35% at kink.
Next Steps
We welcome community feedback.